Law:

Section:

Section 147, read with section 148 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 2002-03 - By impugned notice under section 148, assessee-company's assess-ment for relevant assessment year was sought to be reopened on ground that goodwill not being an intangible asset was not eligible for depreciation and since assessee had not disclosed nature of goodwill on which it had claimed depreciation, there was failure on its part to disclose fully and truly all material facts necessary for its assessment - Whether when according to revenue no depreciation was allowable on goodwill, then it would be wholly irrelevant to consider nature of goodwill and, therefore, reopening of assessment on ground that assessee had not disclosed nature of goodwill was unjustified - Held, yes FACTS The Assessing Officer issued a notice under section 148 to the assessee-company seeking reopening of its assessment for the relevant assessment year, solely on the ground that goodwill was not an intangible asset and, therefore, was not eligible for depreciation; and that since the assessee had not disclosed nature of goodwill on which it had claimed depreciation, there was failure on its part to disclose fully and truly all material facts necessary for its assessment. The assessee objected to the reopening of the assessment, but the Assessing Officer rejected its objections. On writ petition : HELD Under section 147, an assessment made under section 143(3) can be reopened after the expiry of four years from the end of the relevant assessment year, if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. [Para 9] In the instant case, it was the case of the revenue that the assessee had not disclosed the nature of the goodwill and, therefore, there was failure to disclose fully and truly all materials facts. [Para 10] There was no merit in the aforesaid argument because if according to the revenue no depreciation was allowable on the…

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